The Hong Kong company’s shares were downgraded by a number of brokerage firms, but according to some analysts the selloff is an overreaction and has created a buying opportunity for investors.

It would probably be "business as usual" for the property firm, Alex Wong, director of Ample Capital told CNBC on Friday.

There were few details on why brothers Raymond and Thomas Kwok, the two Chairmen of the firm were arrested by Hong Kong's Independent Commission Against Corruption (ICAC) Thursday night. The two brothers weren’t charged and were later released on bail.

According to the ICAC, those arrested were "alleged to have committed offences under the Prevention of Bribery Ordinance and misconduct in public office".

There is growing anger in Hong Kong about surging property prices and the arrests come just days after the territory chose a new chief executive, Leung Chun-ying, who is seen as a Beijing loyalist.

Ample Capital’s Wong said he would wait for Sun Hung Kai Properties’ shares to drop to near HK$95 before buying. "I think eventually it would recover. This is a very well run company. The profile of its land bank and business properties is very good."

"In the meantime, I don't think people would be willing to pay a premium again," he added. "That's why valuation will not go back to its peak level."

Barclays Capital Friday downgraded the stock to '3-Underweight' from '2-Equal Weight' with a 12-month price target of HK$92.16. Citi also dropped the rating on the share from 'Buy' to 'Neutral'. It lowered its target price to HK$115.95 from from HK$165.64.

"We note the investigations into the suspected bribery offence should have no impact on our estimated NAV (net asset value) of HK$165.64 per share; however, investors are likely to apply a deeper NAV discount on the stock due to the uncertainty relating to the investigations," Citi said in a report Friday. The new target price is based on a 30 percent to NAV, Citi said.

"We believe SHKP's strong fundamentals should make the stock a long-term leader in the HK property market; however, we believe in the short term the stock will trade at a relatively deep discount until the ICAC concludes its investigation."

Brook McConnell, president of South Ocean Management, a fund manager in Hong Kong, agreed that valuations for other property firms, which fell in tandem with Sun Hung Kai Properties, are cheap now.

Shares of Cheung Kong Holdings fell 2.32 percent to HK$101 and New World Development dropped 2.72 percent to HK$9.30 by 1 p.m. in Hong Kong as investors worried about whether the investigation would spread to other property developers.

"I think this is an opportunity for quick traders to make a profit right now, buying (property stocks) here and waiting till the whole thing blows over," McConnell told CNBC Friday. "We've got an over-reaction here perhaps because it's the last day of the month, trading of the quarter. For long-term investors, they have to value the stocks on their own."

"One might think other property stocks which have fallen on the back of this news are buys, because the news is immaterial to them," Julius Baer's Head of Asia Research, Mark Matthews said.

But he warned the ICAC may investigate other similar cases and there wasn’t enough information to make a good decision at this point.